Correlation Between Kasten and Next Meats
Can any of the company-specific risk be diversified away by investing in both Kasten and Next Meats at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kasten and Next Meats into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasten Inc and Next Meats Holdings, you can compare the effects of market volatilities on Kasten and Next Meats and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kasten with a short position of Next Meats. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasten and Next Meats.
Diversification Opportunities for Kasten and Next Meats
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kasten and Next is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kasten Inc and Next Meats Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Meats Holdings and Kasten is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kasten Inc are associated (or correlated) with Next Meats. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Meats Holdings has no effect on the direction of Kasten i.e., Kasten and Next Meats go up and down completely randomly.
Pair Corralation between Kasten and Next Meats
Given the investment horizon of 90 days Kasten is expected to generate 8.4 times less return on investment than Next Meats. But when comparing it to its historical volatility, Kasten Inc is 4.36 times less risky than Next Meats. It trades about 0.05 of its potential returns per unit of risk. Next Meats Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Next Meats Holdings on September 12, 2024 and sell it today you would lose (69.78) from holding Next Meats Holdings or give up 99.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kasten Inc vs. Next Meats Holdings
Performance |
| Timeline |
| Kasten Inc |
| Next Meats Holdings |
Kasten and Next Meats Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kasten and Next Meats
The main advantage of trading using opposite Kasten and Next Meats positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasten position performs unexpectedly, Next Meats can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Next Meats will offset losses from the drop in Next Meats' long position.| Kasten vs. Interups | Kasten vs. Church Crawford | Kasten vs. Active Health Foods | Kasten vs. Gold Ent Group |
| Next Meats vs. C2E Energy | Next Meats vs. Tanke Biosciences | Next Meats vs. Supurva Healthcare Group | Next Meats vs. Kasten Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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